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Oopsies!

Submitted by Roanman on Wed, 05/30/2012 - 17:10

 

This one has been bouncing around for the past couple of days, this particular version of the story is from The Guardian.

Our favorite part comes in the last paragraph.

As an aside, Ms. Lagarde swore that she was intent on adopting her own personal austerity budget immediately upon receipt of her new Wolf Systems Solar Storm 32S.

As always click on the photo for the entire story.

 

Christine Lagarde, scourge of tax evaders, pays no tax

IMF boss who caused international outrage when she suggested that Greeks should pay their taxes earns a tax-free salary.

 in Paris

IMF managing director Christine Lagarde. Photograph: Dominick Reuter/Reuters
 
Christine Lagarde, the IMF boss who caused international outrage after she suggested in an interview with the Guardian on Friday that beleaguered Greeks might do well to pay their taxes, pays no taxes, it has emerged.

As an official of an international institution, her salary of $467,940 (£298,675) a year plus $83,760 additional allowance a year is not subject to any taxes.

The former French finance minister took over as managing director of the IMF last year when she succeeded her disgraced compatriot Dominique Strauss-Kahn, who was forced to resign after he faced charges – later dropped – of sexually attacking a New York hotel maid.

Lagarde, 56, receives a pay and benefits package worth more than American president Barack Obama earns from the United States government, and he pays taxes on it.

The same applies to nearly all United Nations employees – article 34 of the Vienna convention on diplomatic relations of 1961, which has been signed by 187 states, declares: "A diplomatic agent shall be exempt from all dues and taxes, personal or real, national, regional or municipal."

 

Where exactly does one go to sign up for a U.N. gig?

 

 

Abusing the tax code

Submitted by Roanman on Tue, 05/01/2012 - 10:39

 

Here's just a little more nonsense resultant from our nonsensicle tax code.

From Rueters, this FAIL like much of the rest of our system of taxation is the consequence of trying to work social policy through the tax code, which should be an instrument for raising revenue for the government and nothing else.

 

 

I'd like a Double Irish With A Dutch Sandwich please.

Submitted by Roanman on Tue, 05/01/2012 - 07:36

 

The funniest thing to me about the growing brewhaha over Google and now Apple's perfectly legal (and dare I say it? ... moral) by the letter application of our moronic tax code is the fact that their approach is so well known and by the way so pervasive, that not only does it have a name, "Double Irish With A Dutch Sandwich" it also has a Wikipedia page.

From Wikipedia.

As always click anywhere below for the entire article.

 

Double Irish arrangement

 

Overview

Typically, the company arranges for the rights to exploit intellectual property outside the United States to be owned by an offshore company. This is achieved by entering into a cost sharing agreement between the U.S. parent and the offshore company, in the terms of U.S. transfer pricing rules. The offshore company continues to receive all of the profits from exploitation of the rights outside the U.S., without paying U.S. tax on the profits unless and until they are remitted to the U.S.[2]

It is called "The Double Irish" because it requires two Irish companies to complete the structure. The first Irish company is the offshore company which owns the valuable non-U.S. rights. This company is tax resident in a tax haven, such as Bermuda or the Cayman Islands. Irish tax law provides that a company is tax resident where its central management and control is located, not where it is incorporated, so that it is possible for the first Irish company not to be tax resident in Ireland. The first Irish company licenses the rights to a second Irish company, which is tax resident in Ireland, in return for substantial royalties or other fees. The second Irish company receives income from exploitation of the asset in countries outside the U.S., but its taxable profits are low because the royalties or fees paid to the first Irish company are deductible expenses. The remaining profits are taxed at the Irish rate of 12.5%.

For companies whose ultimate ownership is located in the United States, the payments between the two related Irish companies might be non-tax-deferrableand subject to current taxation as Subpart F income under the Internal Revenue Service's Controlled Foreign Corporation regulations if the structure is not set up properly. This is avoided by organizing the second Irish company as a fully owned subsidiary of the first Irish company resident in the tax haven, and then making an entity classification election for the second Irish company to be disregarded as a separate entity from its owner, the first Irish company. The payments between the two Irish companies are then ignored for U.S. tax purposes.[1]

 

Dutch Sandwich

The addition of a Dutch Sandwich to the Double Irish scheme further reduces tax liabilities. Ireland does not levy withholding tax on certain receipts fromEuropean Union member states. Revenues from income of sales of the products shipped by the second Irish company are first booked by a shell company in the Netherlands, taking advantage of generous tax laws there. Funds needed for production cost incurred in Ireland are transferred there, the remaining profits are transferred to the first Irish company in Bermuda. If the two Irish holding companies are thought of as "bread" and the Netherlands company as "cheese," this scheme is referred to as the "Dutch Sandwich."[3] The Irish authorities never see the full revenues and hence cannot tax them, even at the low Irish corporate tax rates. There are equivalent Luxembourgeois and Swiss sandwiches.

 

Companies using the arrangement

Major companies known to employ the Double Irish strategy are:

 

I left the list out just because I wanted you to give Wikipedia a click as I couldn't figure a way to abbreviate this post and still have it make sense.

The moral remains constant.

The lower the rate, the less incentive to create and exploit loopholes in your tax code and more importantly the greater the incentive you create for the rest of the world to bring their taxable income to you.

That's a good thing.

Best of all, the only cost of this approach accrues to your corrupted government types who lose the ability to exchange tax writing favors for political power.

Be still my beating heart.

 

How Apple Sidesteps Billions in Global Taxes

Submitted by Roanman on Sat, 04/28/2012 - 21:08

 

From The New York Times, here's yet another lesson on the consequences of our dumbass tax policies.

As always click on either photo for the entire piece.

Recommended.

 

How Apple Sidesteps Billions in Global Taxes

Published: April 28, 2012  By  and 

 

                       

Braeburn Capital, an Apple subsidiary in Reno, Nev., manages and invests the company’s cash. Nevada has a corporate tax rate of zero, as opposed to the 8.84 percent levied in California, where Apple has its headquarters.

 

RENO, Nev. — Apple, the world’s most profitable technology company, doesn’t design iPhones here. It doesn’t run AppleCare customer service from this city. And it doesn’t manufacture MacBooks or iPads anywhere nearby.

Yet, with a handful of employees in a small office here in Reno, Apple has done something central to its corporate strategy: it has avoided millions of dollars in taxes in California and 20 other states.

Apple’s headquarters are in Cupertino, Calif. By putting an office in Reno, just 200 miles away, to collect and invest the company’s profits, Apple sidesteps state income taxes on some of those gains.

California’s corporate tax rate is 8.84 percent. Nevada’s?  

Zero.

Setting up an office in Reno is just one of many legal methods Apple uses to reduce its worldwide tax bill by billions of dollars each year. As it has in Nevada, Apple has created subsidiaries in low-tax places like Ireland, the Netherlands, Luxembourg and the British Virgin Islands — some little more than a letterbox or an anonymous office — that help cut the taxes it pays around the world.

Almost every major corporation tries to minimize its taxes, of course. For Apple, the savings are especially alluring because the company’s profits are so high. Wall Street analysts predict Apple could earn up to $45.6 billion in its current fiscal year — which would be a record for any American business.

Apple serves as a window on how technology giants have taken advantage of tax codes written for an industrial age and ill suited to today’s digital economy. Some profits at companies like Apple, Google, Amazon, Hewlett-Packard and Microsoft derive not from physical goods but from royalties on intellectual property, like the patents on software that makes devices work. Other times, the products themselves are digital, like downloaded songs. It is much easier for businesses with royalties and digital products to move profits to low-tax countries than it is, say, for grocery stores or automakers. A downloaded application, unlike a car, can be sold from anywhere.

The growing digital economy presents a conundrum for lawmakers overseeing corporate taxation: although technology is now one of the nation’s largest and most valued industries, many tech companies are among the least taxed, according to government and corporate data. Over the last two years, the 71 technology companies in the Standard & Poor’s 500-stock index — including Apple, Google, Yahoo and Dell — reported paying worldwide cash taxes at a rate that, on average, was a third less than other S.& P. companies’. (Cash taxes may include payments for multiple years.)

 

To quote almost everybody on taxes over and over and ......

Submitted by Roanman on Sun, 04/15/2012 - 08:47

 

The crime of taxation is not in the taking it; it's in the way it's spent.  Will Rogers
 
When there's a single thief, it's robbery.  When there are a thousand thieves, it's taxation.  Vanya Cohen
 
Taxation with representation ain't so hot either.  Gerald Barzan
 
Taxes, after all, are dues that we pay for the privileges of membership in an organized society.  Franklin D. Roosevelt
 
The taxpayer - that's someone who works for the federal government but doesn't have to take the civil service examination.  Ronald Reagan
 
America is a land of taxation that was founded to avoid taxation.  Laurence J. Peter
 
I'm proud to pay taxes in the United States; the only thing is, I could be just as proud for half the money.  Arthur Godfrey

Unquestionably, there is progress.  The average American now pays out twice as much in taxes as he formerly got in wages.  H.L. Mencken
 
The nation should have a tax system that looks like someone designed it on purpose.  William Simon
 
We must care for each other more, and tax each other less.  Bill Archer
 
The expenses of government, having for their object the interest of all, should be borne by everyone, and the more a man enjoys the advantages of society, the more he ought to hold himself honored in contributing to those expenses.  Anne Robert Jacques Turgot
 
The art of taxation consists in so plucking the goose as to get the most feathers with the least hissing.  Jean Baptist Colbert, attributed
 
What at first was plunder assumed the softer name of revenue.  Thomas Paine
 
Did you ever notice that when you put the words "The" and "IRS" together, it spells "THEIRS?"  Unknown
 
We have long had death and taxes as the two standards of inevitability.  But there are those who believe that death is the preferable of the two.  At least with death, it doesn't get worse every time Congress meets." Erwin N. Griswold

People who complain about taxes can be divided into two classes:  men and women.  Unknown
 
Taxes:  Of life's two certainties, the only one for which you can get an automatic extension.  Unknown
 
To force a man to pay for the violation of his own liberty is indeed an addition of insult to injury.  Benjamin Tucker
 
Today, it takes more brains and effort to make out the income-tax form than it does to make the income.  Alfred E. Neuman
 
I am thankful for the taxes I pay because it means that I'm employed.  Nancie J. Carmody
 
The point to remember is that what the government gives it must first take away.  John S. Coleman
 
Philosophy teaches a man that he can't take it with him; taxes teach him he can't leave it behind either.  Mignon McLaughlin
 
The government’s view of the economy could be summed up in a few short phrases:  If it moves, tax it.  If it keeps moving, regulate it.  And if it stops moving, subsidize it.  Ronald Reagan
 
I like to pay taxes.  With them I buy civilization.  Oliver Wendell Holmes, Jr.
 
The wages of sin are death, but after they take the taxes out, it's more like a tired feeling, really.  Paula Poundstone
 
You must pay taxes.  But there's no law that says you gotta leave a tip.  Morgan Stanley advertisement
 
U.S. Internal Revenue Service: an agency modeled after the revenue raising concepts of the 19th century economist, Jesse James.  Robert Brault 
 
There's nothing wrong with the younger generation that becoming taxpayers won't cure.  Dan Bennett
 
There may be liberty and justice for all, but there are tax breaks only for some.  Martin A. Sullivan
 
The income tax created more criminals than any other single act of government.  Barry Goldwater
 
Taxes grow without rain.  Jewish Proverb
 
I don't know if I can live on my income or not - the government won't let me try it.  Bob Thaves, "Frank & Ernest"
 
Of all debts, men are least willing to pay their taxes; what a satire this is on government.  Ralph Waldo Emerson
 
Any tax is a discouragement and therefore a regulation so far as it goes.  Oliver Wendell Holmes, Jr.
 
The flat tax would be so simple, you could fill it out on a post card.  A post card that would say, in effect, having a wonderful time; glad most of my money is here.  Steve Forbes
 
Question:  " I understand that Congress is considering a so-called 'flat' tax system.  How would this work?"  Answer:  "If Congress were to pass a 'flat' tax, you'd simply pay a fixed percentage of your income, and you wouldn't have to fill out any complicated forms, and there would be no loopholes for politically connected groups, and normal people would actually understand the tax laws, and giant talking broccoli stalks would come around and mow your lawn for free, because Congress is NOT going to pass a flat tax, you pathetic fool."  Dave Barry
 
A fine is a tax for doing something wrong.  A tax is a fine for doing something right.  Unknown
  
The payment of taxes gives a right to protection.  James M. Wayne
 
If we don't do something to simplify the tax system, we're going to end up with a national police force of internal revenue agents.  Leon Panetta
 
What is the difference between a taxidermist and a tax collector?  The taxidermist takes only your skin.  Mark Twain
 
All the Congress, all the accountants and tax lawyers, all the judges, and a convention of wizards all cannot tell for sure what the income tax law says.  Walter B. Wriston
 
The politicians say "we" can't afford a tax cut.  Maybe we can't afford the politicians.  Steve Forbes
 
Intaxication:  Euphoria at getting a refund from the IRS, which lasts until you realize it was your money to start with.  Unknown
 
You don't pay taxes - they take taxes.  Chris Rock
 
People try to live within their income so they can afford to pay taxes to a government that can't live within its income.  Robert Half
 
I can give you 1040 good reasons why I hate the government.  The Quote Garden
 
 
Everyone of these quotes came from Quote Garden
 
 

Sometimes a couple charts along with a couple videos are all you need

Submitted by Roanman on Wed, 04/11/2012 - 17:29

 

The following is taken from Zero Hedge.

With apologies to Tyler Durden, I took for all practical purposes the entire post as I couldn't figure a way to abbreviate it and still suck you into clicking through to read it all.

 

Following the all time record high February budget deficit of $232 billion, the US March budget deficit number is in, and in addition to being bigger than expected, coming at $198.2 billion on expectations of "only" $196 billion, the government outlay in the past month also is the largest March deficit on record.

This brings the total deficit in fiscal 2012 to $779 billion, which is to be expected for a country gripped in total political chaos and which is unable to either raise revenues or lower spending.

What is more disturbing is that over the same period (Oct 1 2011 - March 31, 2012), the US government issued $792 billion in debt, a trend that will continue.

What is most disturbing is that the comparable tax revenues net of refunds, "matching" this increase in deficit and spending, are only $693 billion, in other words the US government is funding well more than half of its cash needs with debt rather than with tax revenue. 

The chart below speaks for itself ...

 

 

... as does the long term chart.

 

 

 

Now, from Learn Liberty.org who typically do a very nice job of explaining economic issues in terms most civilians can easily understand, a two minute vid boiling the conversation about the deficit down to terms practically anybody can grasp.

 

 

Followed by an incomplete (IMHO) conversation having to do with the historical fact that over the past 50 years, massive changes to the tax rate and code have made very little difference in the government's total take as a percentage of GDP.

 

 

That which the left seemingly finds impossible to grasp is the notion that people make decisions about work and money and subsequently change their behavior in response to the tax code.

Raising capital gain rates influences some people to hold assets who would otherwise be sellers.

Reduced sales of financial assets yields a reduction in federal tax receipts as assets become locked in place while dampening economic activity as new endeavors find it more difficult to obtain capital.

Raising marginal rates on labor causes some people to work less as work becomes financially less worth the extra effort.

Fewer hours yields lower incomes along with reduced income and payroll taxes.

Which is why lower tax rates and a simplified tax code will always inspires economic growth and subsequently provide enhanced funding for government.

 

Zug

Submitted by Roanman on Mon, 08/29/2011 - 10:31

 

Here's just another in a long line of examples having to do with why that "Tax the Rch' idea never works.

Sneaky bastards just up and move away ..... take their money with em.

Someone else gains access to their disposable income and you of course, don't get squat.

As usual click on the photo for this Wall Street Journal story.

 

Tax Haven's Tax Haven Pays a Price for Success

By DEBORAH BALL 

 

 

ZUG, Switzerland—Developed nations from Japan to America are desperate for growth, but this tiny lake-filled Swiss canton is wrestling with a different problem: too much of it.

Zug's history of rock-bottom tax rates, for individuals and corporations alike, has brought it an A-list of multinational businesses. Luxury shops abound, government coffers are flush, and there are so many jobs that employers sometimes have a hard time finding people to fill them.

But when Stefan Hurschler, a man who works with the disabled, and his schoolteacher wife decided to expand their family and wanted a bigger house, they found nothing in Zug they could afford. They moved to Zurich, and Mr. Hurschler now commutes back to the town he grew up in.

"There are older people who still live [in Zug] because they bought their homes in the 1960s," said his wife, Lilian. "Or there are the very rich. But there isn't much of a middle class."

If Switzerland is the world's most famous tax haven, Zug amounts to a haven within a haven. It has the highest concentration of U.S.-dollar millionaires in Switzerland, a country where nearly 10% of households meet that standard, according to Boston Consulting Group. The highest personal income tax anyone in Zug has to pay is 22.9%, and companies pay an average of just 15.4%—rates lower than Switzerland's average and far below top rates in the U.S.

 

Tax Rates and Receipts

Submitted by Roanman on Thu, 06/16/2011 - 07:39

 

Here's a nice little chart that comes with an editorial from the Wall Street Journal.

The chart is so good at making it's point I don't think you necessarily need the editorial, but if you want it you can link it up by clicking on the chart ..... as usual.

This is pure human nature at work here.

If most of your profits are going to go to the government anyway but your losses are your own, why bust your ass, why put your capital at risk, why do anything other than the bare minimum?

 

 

If you want some more revenue for public development, your social programs, a couple more wars or straight out vote buying, you are going to have to figure out how to grow the economy.

 

 

How They Keep Us Apart, part three

Submitted by Roanman on Sat, 05/14/2011 - 18:08

 

Distractions abound in this country.

Cynical Roany thinks that this is by design.

The example of this that best speaks to me has to do with taxes.

Your "Silly Little Democrats ............." are always whining about tax cuts for the "The Rich".

Your "Formerly (although still mostly) Feckless Republicans ............." counter that "The Rich" pay almost 90% percent of all the income taxes paid in this country.

The American people pick a side and go to arguing and finger pointing.

Anger and upset are the only outcome.

Media is complicit.

Everybody benefits except the citizenry.

Democrats have their union and legal haters pumping up the masses.

Republicans have their wealthy and middle class constituents feeling themselves to be under siege.

The media get their ratings and sell their advertising because promoting drama is good for business.

As for me?

I got questions.

First of all, who the hell is "Rich"?

As opposed to, who the hell is Rich?

I would truly love to hear the debate where "Rich" finally gets defined.

Is "Rich" a function of income?

Are you "Rich" if you made $250,000 last year?

What if you've never made anywhere near that number ever before?

What if you're unlikely to ever make that much again?

That doesn't happen you say?

I know a raft of guys in the real estate business who had a big year that they have never duplicated.

How about if you're only making $60,000 a year, but it's from a $1,800,000 in CDs or treasuries, and you happen to be living in a nice little, paid for condo in Destin.

"Rich"?

What if you're 62 years old and have a defined benefit retirement plan from a pair of government entities paying $86,000 a year with escalators for inflation until the day you die, plus Social Security, plus all the health care you can eat for $142 a month, and you happen to be living in the nice little paid for condo in Destin right next door to the one mentioned above?

The reason I ask is that my HP 12C (financial calculator) is telling me that the above deal has a "Present Value" of $1,292,228 if capped at 3% (That there is real estate guy talk. Capped is short for cap rate which is an assumed rate of return for some specified investment, which in this case it is arbitrarily set by me at 3% because there is almost negligible risk in a defined benefit government retirement plan.  The less risk, the lower the cap rate.) and amortized over 20 years.

That $1,292,228 is before you even begin to figure for the Social Security benefit, and the true cash value of the health care.

"Rich"?

 

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